Diversified supplier base helps companies explore new markets

27th February 2015

By: Bruce Montiea

Creamer Media Reporter

  

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South African companies should diversify their supplier base to effectively explore new markets and achieve the flexibility required to survive challenging and ever- changing business operating environments, says sustainable supplier diversity promoter the South African Supplier Diversity Council (SASDC).

The SASDC is a corporate-led initiative that brings together private-sector companies with the same business ideals and strategic partners, such as the Department of Trade and Industry, to promote supplier diversity as a business strategy to enhance competitiveness and long-term sustainability.

SASDC membership advocacy head Phinda Magwaza says value-adding supply-chain strategies that enable companies to exploit their full value chains through leveraging the competitiveness, competences and capabilities of their supplier base are central to enabling flexibility and pursuing growth in new markets.

“In First World countries, progressive companies are leading the way in a multicultural marketplace by infusing supplier diversity into their main business processes in unique and creative ways,” she tells Engineering News.

Magwaza adds that, contrary to businesses’ common misconception, supplier diversity does not have to cost more and might provide tangible benefits for the bottom line.

“According to global strategic business advisory and consulting firm Hackett Group, there is no evidence that companies that pursue supplier diversity programmes have less effective operations. Further, these programmes have clearly demonstrated that companies build resilience when they embrace the principles of inclusion.”

The SASDC attempts to create optimal circumstances under which its certified black-owned suppliers and the bigger corporate companies can interact to explore mutually beneficial business relationships. “This is done reactively through our online database of bona fide black-owned businesses, and proactively through matchmaking and linking facilitation interventions,” she says.

She adds that this should serve as a catalyst for unlocking procurement opportunities for black-owned and black-women-owned companies.

“Through the implementation of supplier diversity, we help established companies sustainably integrate underrepresented suppliers into their supply chains, thereby directly improving their corporate brand and image while increasing market share, competitiveness and compliance, and indirectly growing black businesses, employment and the economy.”

Operating Model
Magwaza says the SASDC has a simple operating model through which it delivers value to its members.

The council provides a collaborative platform for like-minded and forward-thinking companies to connect and conduct business with black-owned enterprises through efficient targeted procurement practices and effective supplier development interventions, which are critical elements of strategic supplier diversity.

She adds that, as the SASDC is a collectively owned organisation, a single port of call is created for black-owned enterprises to certify their businesses as credible, compliant and capable of transacting with corporate buyers.

She says the council also capacitates corporate buyers with the skills and tools they need to proactively create opportunities for targeted underrepresented suppliers through formal and informal training activities. It also facilitates capacity-building opportunities for certified suppliers to enhance their capacity, capability and overall competitiveness.

The SASDC recognises that success breeds success, says Magwaza, which is why the council communicates with all its members when tangible outcomes that support the case for supplier diversity are achieved. The council also celebrates these achievements to highlight them to all members.

“Not only does this reinforce doing things right but it also positively sways the opinions of sceptics in support of building a representa- tive, competitive and growing South Africa,” she concludes.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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